Economy gains just 245,000 jobs in November as recovery runs out of steam amid fears of worse to come as COVID cases surge
America's employers sharply scaled back their hiring last month as the viral pandemic accelerated across the country, adding 245,000 jobs, the fewest since April and the fifth straight monthly slowdown.
At the same time, the unemployment rate fell to a still-high 6.7%, from 6.9% in October, the Labor Department said. November's job gain was down from 610,000 in October.
Friday's report of another slowdown in hiring was the latest evidence that the job market and the economy are faltering in the face of a virus that has been shattering daily records for confirmed infections.
Before the pandemic, last month's gains would have been considered healthy. But the U.S. economy is still roughly 10 million jobs below its pre-pandemic level, with a rising proportion of the unemployed describing their jobs as gone for good.
Faster hiring is needed to ensure that people who were laid off during the pandemic recession can quickly get back to work.
Not enough: Economists had anticipated 469,000 new jobs but there were only 245,000 - and the COVID surge is raising fears of more bad jobs news to come
The 245,000 was the smallest gain since the jobs recovery started in May. The fifth straight monthly slowdown in job gains left employment well below its February peak.
The closely watched employment report only covered the first two weeks of November, when the current wave of coronavirus infections started.
Infections, hospitalizations and death rates have sky-rocketed, leading some economists to anticipate a drop in employment in December or January as more jurisdictions impose restrictions on businesses and consumers shun crowded places like restaurants.
Despite the figures, Wall Street went up in the wake of the news, with traders believing it will force Congress to act on stimulus.
'For now, the job market recovery is over until the winter wave of COVID-19 is behind us,' said James McDonald, CEO and chief investment officer of Hercules Investments, based in Los Angeles.
'Whether or not we see a double-dip recession in the U.S. depends on the interplay between the severity of the shutdowns and their impact on the economy over the winter and the size of potential stimulus from Congress and the Federal Reserve.'
A $908 billion stimulus plan gained momentum in Congress on Thursday after a months-long standoff between Republicans and Democrats over aid for businesses and millions of people affected by virus-led shutdowns.
A total of 2,879 Americans died of coronavirus yesterday, which is up from its previous single-day record of 2,804 just one day earlier. It marks a considerable jump from the previous high of 2,603 reported back on April 15 during the initial peak of the pandemic
The number of daily cases also reached all time highs with 217,664 new confirmed infections reported yesterday
The number of hospitalizations also reached a new high with 100,667 patients currently being treated for the virus. Of those hospitalized 19,442 are in the ICU and 6,967 are on ventilators
The two parties also face a Dec. 11 deadline to pass a $1.4 trillion budget or risk a shutdown of the government.
'The market is going to be focused on the progress that is being made on the aid package. We are getting very close... I wouldn't be surprised to see some sort of deal, as early as Monday,' said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
Economists polled by Reuters had forecast payrolls increasing by 469,000 jobs in November. Hiring peaked 4.781 million in June.
Reports on consumer spending, manufacturing and services industries have suggested a slowdown in the recovery from the worst recession since the Great Depression.
The United States is in the midst of a fresh wave of COVID-19 infections. Nearly 200,000 new cases were reported on Wednesday and hospitalizations approached a record 100,000 patients, according to a Reuters tally of official data.
A bipartisan, $908 billion coronavirus aid plan gained momentum in Congress on Thursday as conservative lawmakers expressed their support and Senate and House of Representatives leaders huddled.
More than $3 trillion in government COVID-19 relief helped millions of unemployed Americans cover daily expenses and companies keep workers on payrolls, leading to record economic growth in the third quarter. The uncontrolled pandemic and lack of additional fiscal stimulus could result in the economy contracting in the first quarter of 2021.
For now, there are signs that the economic recovery is stumbling. Consumer spending grew in October at the slowest pace in six months. Seated diners at restaurants are declining again, according to data from the reservations website OpenTable. And a Fed report on business conditions found that growth cooled last month in several Midwest regions and in the Fed´s Philadelphia district.
The unemployment rate has been biased down by people misclassifying themselves as being 'employed but absent from work,' keeping the focus on long-term unemployment and people working part-time for economic reasons.
Economists are also watching the share of women in the labor force. Industries that tend to employ women have been hard hit by the recession. Many women have also quit jobs to look after children as schools have moved to online learning.